Standing Committee E

[Mr. Roger Gale in the Chair]

Communications Bill

Roger Gale: Before we start, I have had a conversation with Mr. Atkinson about progress on the Bill in general and S4C in particular. My understanding, which is confirmed by the Official Report, is that we have had a wide-ranging debate about S4C. Therefore, hon. Members should not be surprised if I confine debate tightly to the amendments this morning. I do not propose to allow a re-run of Tuesday's debate.

Michael Fabricant: On a point of order, Mr. Gale. Last night, the Secretary of State for Culture, Media and Sport said in Oxford that she wishes the BBC to be under tighter controls than at present and that an independent body should conduct a full review of the value for money of the licence fee. Given that the Government rejected the Opposition's suggestions that the BBC should come under Ofcom—just such an independent body—can we revisit the issue?

Roger Gale: Matters arising from the Bill and amendments tabled to it are a subject for the ingenuity of the Committee not the Chair.

Andrew Robathan: On a point of order, Mr. Gale. Together, I suspect, with other hon. Members, I have received a communication from the Electoral Commission about party political broadcasting. We do not operate in a vacuum. The commission recommends changes to legislation. It states:
''We recommend that the proposed duty on OFCOM to determine rules should also include a requirement to establish a committee composed of the broadcasters and sitting under a chairperson who is independent of broadcasters.
We recommend that regulation of the obligation to carry PPBs should be the same for all broadcasters, and that the BBC and the Welsh Authority (S4C) be brought within the scope of OFCOM for this purpose.''
 I understand that the matter is not one for you to rule on, Mr. Gale, but have you heard whether the Government are likely to make a statement on the recommendation, which is germane to our debate on this part of the Bill?

Roger Gale: The straight answer is no, I have had no such information. We shall debate clauses and amendments relating to the matter later in the Bill.Clause 199 Welsh Authority's function of providing S4C and S4C Digital

Clause 199 - Welsh Authority's function of providing S4C and S4C Digital

John Whittingdale: I beg to move amendment No. 283 in
clause 199, page 174, line 11, leave out from 'Authority' to end of line 14 and insert 'must use part of the signals carrying S4C to provide subtitling in relation to programmes included in the service 
and may use part of those signals to provide other services which are ancillary to programmes included in S4C and which are directly related to their contents.'.
 I hope that we can begin in the spirit in which we will continue this morning and dispatch this matter swiftly. The amendment deals with subtitling on S4C. Although the Royal National Institute for Deaf People has done a lot of work to promote subtitling and make it easier for deaf people to enjoy television programmes, the institute tells me that it is not necessary to press the amendment, so I wish to make it clear that I am willing to withdraw it. 
 The amendment, however, gives me an opportunity to put on record my tribute to S4C for its work. S4C exceeded its target for 2002 of 73 per cent. subtitling for Welsh language programmes—the actual outcome was 75 per cent. The target has been increased to 76 per cent. for this year and 80 per cent. by 2004. In addition, 10 hours of programmes a week are subtitled in simplified Welsh, specifically for those who want to learn the language. Even simplified Welsh may be a little ambitious for me if I ever find myself watching S4C on digital television, but it is nevertheless a beneficial addition to help with the take-up and understanding of the Welsh language. 
 S4C has worked with the RNID to ensure that all those with hearing difficulties in Wales are able to access Welsh language programmes. It is worth putting on record that S4C has done a great deal of work on the matter, which is why the amendment is unnecessary.

Simon Thomas: I am grateful to the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) for tabling the amendment because it allows the Committee to reflect on what S4C has achieved and its future objectives. As he said, S4C has its own target of 73 per cent. of subtitling on its programmes, a target that it has exceeded to date. This month the figure will be 76 per cent., and it has set a target of 80 per cent. by 2004. The broadcaster is to be congratulated on that.
 We are discussing access to subtitling for deaf people in Wales. The Committee needs to reflect that most subtitling on S4C is from the Welsh language into the English language. There is also specialist subtitling from the Welsh as spoken on the screen to the simplified Welsh to which the hon. Gentleman referred. One of the difficulties faced by Welsh-speaking deaf people in Wales in the past is that they have not been able to receive the S4C programmes in their own language; Welsh-speaking deaf people in Wales have had subtitles in English and have had to access S4C through the medium of English, which undermines the reason for the existence of S4C. 
 As the hon. Gentleman mentioned, S4C has worked hard with the RNID to overcome the problem. Next year, the 889 service—the service he referred to on teletext—that takes viewers from the spoken Welsh on the screen to the simplified written Welsh will become more widely available. I regret to tell him that there will be less simplification and a more standard Welsh version of what is happening on the screen will be used. Deaf people will welcome the fact that they will 
 have greater access to S4C programmes in their own language. 
 Such matters have been raised by one of my constituents, the Reverend Mort, who is a member of the Wales Council for the Deaf, another active organisation in Wales. He has also said that we have a copyright problem in Wales: many programmes that he and a lot of people in Wales enjoy watching on S4C, such as broadcasts of Eisteddfodau or choral singing, have a copyright problem to do with putting the lyrics on screen as subtitles. Deaf people can watch a subtitled programme up to a certain point, but when the music kicks in there are no subtitles. Now is an opportunity for the Minister to explain how S4C may be assisted to overcome its difficulties with subtitling and subtitling costs. 
 We need to go back to where we were on Tuesday and consider the expansion of S4C's services, particularly in the digital age, and how it might be better funded to meet some of the challenges. I support the hon. Gentleman's praise for S4C. I note that improvements are already happening and more significant improvements are planned within the next year. I hope that S4C, the RNID and other deaf organisations in Wales will continue to work together to ensure the best possible access to both English and Welsh through the medium of subtitling into Welsh-language programmes. 
 It is not only deaf people who benefit from subtitling on S4C; for some reason, my daughter always watches programmes through subtitling—English or Welsh. It is a service that is available and it obviously enhances the enjoyment of S4C programmes for many people in Wales.

Kim Howells: Before I speak to the amendment, Mr. Gale, would it be in order for me to answer some of the issues that were raised on Thursday on the clause?

Roger Gale: The hon. Gentleman puts me in a slight quandary because I was intending, exceptionally, to permit a stand part debate because an hon. Member has already said he wishes to speak on a stand part debate. I am fairly relaxed about the matter.
Michael Fabricant rose—

Roger Gale: One moment!

Michael Fabricant: I am trying to be helpful.

Roger Gale: Please do not.
 If the Minister will deal with the issues now, I am willing to call the hon. Gentleman as well. Perhaps we can deal with the matter in that way and without a stand part debate.

Kim Howells: I shall be brief.
 On Thursday, we had a hybrid but useful debate that ranged across several clauses. I shall refer to a point raised by my hon. Friend the Member for Ogmore (Huw Irranca-Davies), who is not present. Our approach has been that the obligations placed on the Welsh authority by the Bill should be broadly comparable to those placed on the BBC in part by the 
 Bill but mainly by the BBC agreement. We have departed from that approach only when the nature and functions of the Welsh authority made that necessary or desirable. One example in which we have done so is subtitling, which is the subject of amendment No. 283, to which I shall return. 
 On Thursday afternoon, the hon. Member for Ceredigion (Mr. Thomas) asked what the regulatory position of S4C would be in relation to Ofcom. As I explained on Tuesday, the authority, like the BBC, will remain self-regulating on matters such as impartiality and the fulfilment of its tier 3 remits. However, like the BBC, the authority will be subject to Ofcom regulation in respect of negative content requirements and industry-wide quotas and obligations. 
 The hon. Gentleman also asked whether clause 200 would enable the Welsh authority to launch new services in response to changes in technology. The new services that clause 200 will enable the authority to provide are not restricted to existing technology. As long as the authority provides public services of high quality for the dissemination of information, education or entertainment wholly or mainly to the members of the public in Wales, and provided that the Secretary of State has approved those services, clause 200 will permit the authority to provide them by any means that it thinks fit. There is one exception, which I shall mention. 
 Under clause 200, the Welsh authority may not provide radio services. If it wishes to offer such services, it will be able to provide them as licence services via an S4C company set up under clause 201. We have excluded some services from clause 200 because, as the hon. Gentleman knows, Welsh language public service is already well provided for by the BBC, and we do not think that it would be appropriate for the Welsh authority to divert funds from its existing public services to provide competing publicly funded radio services. 
 The hon. Gentleman asked about S4C funding several times. The Government recognise the financial pressures faced by the Welsh authority and the steps that it has taken to improve efficiency, and I pay tribute to the authority for that. We have given careful consideration to the authority's bid for additional funding in the recent spending review. However, because of the many competing bids that the Department receives, and the pressures on our budget, it was not possible to meet that bid. The Welsh authority's funding arrangements bring advantages as well as the perceived disadvantages. Of course, there will always be constraints on Government expenditure, but Government funding for S4C and the annual increases in relation to the retail prices index have largely protected the authority from the sharp downturn in advertising revenue that commercial broadcasters have recently experienced. 
 I am grateful for the helpful way in which the hon. Member for Maldon and East Chelmsford presented amendment No. 283. I recognise the force of his argument as well as the point made by the hon. Member for Ceredigion about the Welsh authority providing subtitling on S4C. However, the effect of the amendment, as the hon. Member for Maldon and East 
 Chelmsford hinted, would be to require all programmes included in the S4C service to be subtitled from the date on which clause 199 comes into force. That is in contrast to clause No. 293, which makes provision for interim targets to be met by other television services. We are working towards 90 per cent. for Channel 3 and Channel 4, and 80 per cent. for other services, by January 2010. Clause 293 also provides for specified programmes to be excluded from those targets. The amendment would therefore impose substantially tougher targets on S4C than on any other channel. 
 The Welsh authority already provides subtitling on a voluntary basis. When drafting the Bill, we took the view that it should continue to do so on its analogue television service. The authority faces special challenges in the provision of subtitling. As Michael Caine might say, ''Not a lot of people know that.'' The authority caters not only for hearing impaired Welsh speakers but for Welsh learners and for English-speaking viewers like me. The provision of subtitles in two languages creates additional burdens and requires the authority to make judgments that are not required of other broadcasters. The Government believe that the authority has shown itself able to balance the subtitling needs of different audiences and to do so well. We are not therefore persuaded that statutory subtitling targets are the best way forward for the S4C analogue service. I am glad to hear that the hon. Member for Maldon and East Chelmsford has decided not to press his amendment.

Simon Thomas: The Minister says, rightly, that S4C should continue with the voluntary way in which it deals with things at the moment. However, if there is a problem in future, will Ofcom have any role in either regulating or reporting on any perceived failure by S4C to subtitle its programmes adequately?

Kim Howells: I expect Ofcom to hold constant discussions with the Welsh authority on subtitling. Access is a central issue, as is strengthening the function of S4C in protecting and promoting the Welsh language. Subtitling will be an important element of that.
 I forgot to answer the hon. Gentleman's question on copyright. As somebody who dealt with this issue at the Department of Trade and Industry, I know that it is an issue for the Patent Office. The question of copyright is difficult. In Wales, many authors depend on the revenue that they receive from copyrighted material. That material belongs to them and may be their only means of earning money. The issue is delicate and will have to be discussed with S4C and broadcasters in general.

Chris Bryant: Would not this matter be dealt with by the incorporation of the copyright directive?

Kim Howells: Partly—but the copyright directive is a large and blunt instrument. In cases such as that raised by the hon. Member for Ceredigion, programmes and subjects that have traditionally been the fare of a service such as S4C could run into difficulty because of
 interpretation or implementation. We have to get things right. My hon. Friend is right to suggest that things are changing quickly on the copyright front and, more generally, on the intellectual property front.
 I hope that the hon. Gentleman will withdraw his amendment.

Michael Fabricant: I want to speak not so much on subtitling but more on the main part of the Bill. My point is a straightforward one on the provision of digital services.
 In earlier debates, hon. Members have mentioned the problems of the topology of Wales and the means by which digital transmissions can be disseminated to viewers. People in valleys—especially valleys with south-facing hills—cannot receive satellite access. As the hon. Member for Rhondda (Mr. Bryant) has said on numerous occasions, cable services are not widespread in rural areas of Wales or the rest of the United Kingdom. One practical way in which a digital service can be provided in Wales is by the use of relay transmitters, which, at present, do not carry digital terrestrial broadcasting. The Minister will be aware that that is currently licensed by the Independent Television Commission to Freeview. 
 Clause 199 is concerned with the provision of S4C digital. So far, the entire discussion has been around programme content. Will the Welsh authority have the power to provide funding for digital terrestrial television transmitters and antennae to be added to the relay transmitters? What is the Government's view on the funding of such services by the Welsh authority, because without the provision of digital terrestrial television, many areas will have no form of digital television for S4C or any other service available for many viewers in Wales?

Roger Gale: Order. We have discussed the fact that these issues are complicated and interrelated. In fact, the transmission issue is not directly related to clause 199 and the duties of S4C but rather to the transmission company. However, the hon. Gentleman has raised the point and I am perfectly happy to allow the Minister to respond.

Kim Howells: First, Ofcom will not have the funding to embark on upgrading relay stations. May I disabuse the hon. Gentleman on one thing? Those of us who live on the south-facing slopes of the Welsh hills are not without satellite signals. I have received Sky satellite signals for the past 12 years, as has everybody else I know in Pontypridd, which is in a south-facing valley.

Michael Fabricant: Will the Minister give way?

Kim Howells: No, I will not, because the hon. Gentleman has had enough time.
 I remind the hon. Gentleman that we Welsh do not live in some cultural backwater. He should remember that a higher proportion of people have digital reception in Wales than in any other part of Great Britain. That might be due to satellite coverage, but Wales was the testing ground in the 1950s for cable coverage, and my own village had cable. The coverage 
 was stopped and cable did not develop for 30 years—that is absolutely true.

John Whittingdale: This has been a useful brief debate. Given that S4C has demonstrated a commitment to subtitling and that, on that basis, RNID does not consider the amendment to be necessary, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 199 ordered to stand part of the Bill.

Clause 200 - Powers to provide other services

Question proposed, That the clause stand part of the Bill.

Simon Thomas: Will the Minister say a little about the new services that S4C will be empowered to provide? When he responded to clause 199, he kindly responded to comments that I made on Tuesday afternoon, which I shall not repeat. What is the meaning of the word ''substantial'' in clause 200(5)? The clause provides that a substantial proportion of any new services provided by the Welsh authority, which may include such things as internet services—everything but radio—must be in Welsh. If a substantial proportion must be in Welsh, what will be the language of the remainder? S4C is a Welsh-language broadcaster, not an English-language broadcaster.
 There is debate in Wales about the amount of English that is sometimes included on S4C and BBC Radio Cymru programmes. Those arguments are often generational because the older generation is a little unhappy about the way in which youth-orientated programmes mix languages, although that is perhaps a more natural reflection of the way in which the language develops, especially in areas where there is bilingual education. However, there is a question whether clause 200 would empower S4C to produce wholly English-language programmes, or programmes in any other language, such as German. That might bring S4C into conflict with other broadcasters in Wales. 
 Two points should be emphasised for the Committee. S4C does not produce programmes itself; it commissions programmes. S4C is a commissioning body and consequently the independent sector—ITV in Wales and the BBC—produces the programmes that S4C broadcasts. S4C is a hugely important part of the Welsh broadcasting industry. 
 The second point reflects the debate on Tuesday afternoon when the hon. Member for Rhondda said that many people in Wales want to receive Channel 4 and English-language programmes, not Welsh-language programmes. It must be emphasised that from the point of view of English-language public service broadcasting in Wales, we have two BBC channels, Channel 3, Channel 4 and Channel Five. Those are also public service broadcasters for Wales, and they have an obligation, which would be greater if some later amendments were passed, to reflect through 
 their public service remits the nature of the regions and nations of the United Kingdom. 
 There does not seem to be a clear role for S4C in making anything other than Welsh-language programmes. There may, however, be an element of English in such programmes. For example, if the Minister were to be interviewed on S4C about the Pontyprydd crags, or something like that, he would have to give his views in English. S4C has always included programmes with English speakers, because that is how the language and culture can be shared with everyone in Wales. That is not, however, the same thing as saying that programmes made by S4C should be in any other language than Welsh. Will the Minister explain the thinking behind the term ''substantial''? What would that mean in future for broadcasting and other services in Wales?

Chris Bryant: The hon. Member for Ceredigion has raised an important point. We will, during the next five or 10 years, be moving towards a fully digital Wales, in which everyone would receive both Channel 4 and S4C.

Michael Fabricant: How?

Chris Bryant: Through Sky, which is received by some 55 per cent. of my constituents—the dishes can be counted when driving up the valleys—or perhaps through digital terrestrial television. However it is that those two channels are received, we must aim to ensure that, during the next 10 years, everyone in Wales can receive both.
 S4C digital is wholly in Welsh, whereas S4C, the traditional analogue service, is a mixture of English and Welsh language programmes. In a sense, S4C is a channel for the whole of Wales, rather than just for the Welsh-speaking population. How shall we ensure that, when the moment comes for S4C digital to replace the traditional, analogue S4C, with its Welsh and English language mixture, S4C is still a channel for Wales and not just for the Welsh-language population? I am concerned about the fact that at the moment Channel 4 feels that it has no remit to cover Welsh issues, or to transmit in Wales. For example, it rarely covers Welsh political issues and the National Assembly because it has no remit to transmit directly in Wales. How does the Minister see that transition progressing during the next 10 years?

Simon Thomas: It is important to get this right. The hon. Gentleman is wrong to say that Channel 4 has no remit to transmit in Wales. Channel 4 is carried by S4C. The hon. Gentleman is correct in what he says about Channel 4 programmes, but that does not mean that it does not have the remit. Channel 4 has turned its back on English-language programmes that reflect the Welsh issues that he mentioned.

Chris Bryant: The hon. Member for Ceredigion is entirely right. It would be nice if there came a time when S4C felt that it was within its remit to report and use the views of Welsh people in Wales who speak English. Similarly, Channel 4 should use its remit more robustly in respect of showing life in Wales.

Kim Howells: Under subsection (1), the authority may not provide any other television programme
 service, unless the provision of the service has been approved by an order issued by the Secretary of State and it meets the additional tests that are set out in the clause. The authority must be satisfied that that is a high quality public service for the dissemination of information, education or entertainment wholly, or mainly, to the public in Wales. The provision of the service must broaden the range of television broadcasting services that are available in Wales. In response to the point that was made by the hon. Member for Ceredigion, I would say that the authority must also ensure that a substantial proportion of the programmes included in the service are in Welsh—that is what it was set up for. That is a matter of judgment for the authority. We believe that it has exercised that judgment properly and very well.
 Under subsection (2), the Welsh authority may also provide services that are neither television nor sound services, provided that they are approved, by order, by the Secretary of State. Such services must also be provided for reception wholly or mainly by members of the public in Wales and be a public service of high quality for the dissemination of information, education or entertainment. An order that approves the provision of a new service under the clause must set out the nature and characteristics of the service and, if it were a television programme service, must set out its public service remit. 
 Subsection (7) enables the authority to provide programme-related assistance for disabled people, other services ancillary to programmes and directly related to their contents and in relation to any part of a digital service or any other ancillary service. The Welsh authority's remit—[Interruption.]

Roger Gale: Order. I appreciate that members of the Committee need to communicate with each other, but that practice has been going on for a long time.

Kim Howells: The Welsh authority's remit is to provide on S4C digital a broad range of high-quality and diverse programming. The remit will enable the authority to provide programming for everyone in Wales. The points raised by my hon. Friend the Member for Rhondda are important. Until he spoke a moment ago, I have always understood that the remit of Channel 4 included me and everyone else in Wales in what it produces. It is not only Channel 4 that has problems with the coverage of news in Wales, but almost every newspaper. I never see reports in national newspapers about the finest rugby team in Wales, Pontypridd. That is a widely held gripe.
 It is often the curse of Welsh television and film that we believe that we can make films and programmes only about Wales or Welsh people in Patagonia, a point raised initially by the hon. Member for Ceredigion. That is extremely limiting, but one of the great achievements of S4C, especially over the past five years or so, is that it has realised that it can make films about anywhere in the world on any subject. That has been a big step forward for the Welsh media. 
 Question put and agreed to. 
 Clause 200 ordered to stand part of the Bill.

Clause 201 - Other activities of the Welsh Authority

Question proposed, That the clause stand part of the Bill.

Michael Fabricant: The Minister, who seems incapable of speaking unless he receives a briefing note from his officials, gave no sensible response to my sensible question about digital terrestrial television. Under the clause, according to the explanatory notes to the Bill,
''the Welsh Authority must obtain the approval of the Secretary of State under subsection (2). The types of activities that may be approved by her under subsection (2) include those needed to secure, and those in connection with, the provision of licensable services''.
 I shall clarify the point that the Minister chose to misunderstand. If someone's home faces a south-facing hill, he or she will not be able to receive a satellite transmission. The hon. Gentleman will be aware that a geostationary satellite has to sit in a geostationary position over the equator. As we live in the northern hemisphere, satellite dishes have to face south. If someone were living at the base of a high hill or mountain, there will be no line-of-sight access to a geostationary satellite. As low earth orbit satellite constellations are not currently used for the provision of digital television, it follows that many people living in that position—indeed, all people living there—will not, because of the basic laws of physics, be able to receive satellite transmission. It has frequently been pointed out—by the hon. Members for Rhondda and for Ogmore, and by many other hon. Members both in this Committee and during Welsh questions—that although this Government and the previous Government have made valiant efforts to provide cable services throughout Wales, 100 per cent. provision is impossible to achieve. 
 Nevertheless, Crown Castle Ltd. and NTL provide analogue television to about 97 per cent. of the population of Wales. However, most of that reception capability is provided by relay transmitters that do not at present have digital terrestrial television. As any form of digital television can be provided to those people only by digital terrestrial television, would the Welsh authority be in a position to fund the placing of digital television transmitters and the relevant antennae on top of relay transmitters? If that were the case, under clause 201, would the Minister be minded to give it the power to do that? 
 As the Minister sat down after answering my previous question, the officials handed him a note. Perhaps he will now be more polite, informative and helpful to the Welsh people by answering that question.

Roger Gale: Minister?

Kim Howells: Well, all right.

Roger Gale: The Minister is not compelled to respond.

Kim Howells: I will answer the hon. Member for Lichfield (Michael Fabricant) because I was brought up properly. I do not know what he had for breakfast, but it has clearly upset him. [Interruption.]

Roger Gale: Order.

Kim Howells: Subsection (7) amends section 61 of the Broadcasting Act 1990 so that the Secretary of State may increase the annual grant that is paid to the Welsh authority by more than the rate of inflation—as that is measured by the RPI—if she is satisfied that additional funding is appropriate in the light of the cost that it incurs in providing its public services and broadcasting and distributing such services. At present, the Secretary of State may take into account only the cost of transmitting S4C and S4C digital when considering such an increase.

Michael Fabricant: On a point of order, Mr. Gale. The Minister has still not answered the question, and I do not know why he refuses to do so. I simply want to know whether there is capability for the provision of this. All I can do is continue—when it is in order—to ask the same question. All I want is a simple yes or no, and to know what the Government think about Freeview. It is not unreasonable to want that.

Roger Gale: First and foremost it is not the responsibility of the Chair to promote ministerial answers—it is for the Minister to decide whether he wishes to respond. The hon. Gentleman has made his point forcefully—and, on occasions, not entirely in parliamentary language. I have stretched a point because the matter is not, strictly speaking, covered by clause 201. Transmission is not the responsibility of the Welsh authority. If the Minister chooses not to respond, that is up to him. We have looked carefully at the Bill, and I cannot find anywhere else in the Bill where this is covered, so it might be helpful if the hon. Gentleman were to put his concerns to the Minister in writing; I am sure that the Minister will then seek to respond courteously.
 Question put and agreed to. 
 Clause 201 ordered to stand part of the Bill.

Clause 202 - Welsh authority finances

Question proposed, That the clause stand part of the Bill.

Simon Thomas: I wish to ask a couple of questions that relate to the finances of the Welsh authority—of S Pedwar C.
 Subsection (1) makes it clear that the Welsh authority must not impose charges on persons for receiving its services in Wales. That leads me to ask an interesting question: can it impose charges on persons for receiving its services outside Wales? At present, there is a problem: people in London, for example, can get S4C via satellite by putting in a postcode that is different from their London postcode, and S4C has to pay each time someone subscribes in that way. In future, S4C may wish to recoup some of those payments to enhance its financial position and avoid making a loss. Would it be in order for S4C to charge for services received outside Wales? It would open an interesting box of tricks for the company. 
 On the issue of funding for S Pedwar C, the Minister responded earlier to comments that I made on Tuesday about how the Government had examined 
 S4C's finances. I accept his point that S4C has a certainty of funding that other independent broadcasters do not have because it is a public sector funded body that is not completely reliant on advertising revenue, selling its programmes abroad or co-working. Its position is different from that of Channel 4, although Channel 4 started in the same way. 
 The real comparison, however, is with the BBC because S4C is a unique public sector broadcaster in Wales, specifically established by statute to provide public service programmes in the Welsh language. That is not a commercial activity, or one from which it is possible to make money or even be commercially efficient, otherwise Harlech Television would have done so many years ago—it tried and failed. It is important to emphasise that we are funding S Pedwar C for reasons of cultural diversity—to support further use of the Welsh language—not simply as a television broadcaster, which would be silly. 
 As a public service broadcaster, the BBC is funded in a similar way to meet needs that are not provided for by commercial broadcasters, although we discussed whether the BBC actually did that. We will shortly be debating broadcasting in Gaelic in Scotland, which has similar implications. I would like the Minister to reflect on this matter in the future—he does not have to reply now. The BBC has had a considerable increase in the licence fee to pay for its expansion of digital broadcasting—rightly so, in my opinion. S4C is in a similar position. Should it not receive some recognition for the considerable expansion that it has undertaken in digital broadcasting? 
 S4C does not have a licence fee as such, but everyone in Wales pays the licence fee and gets S4C as well as the Channel 4 parts of S4C included in that deal. On the whole, together with subtitling, people get a good service for their money. There are broadcasts in both languages and S4C makes a contribution to the cultural diversity of Wales—and the United Kingdom. 
 We should remember that S4C contributes to the cultural diversity of the UK. We should all be proud of its support for broadcasting in a less well-used language. Our standing is good on that issue within Europe. To be fair, over the years all Governments have reflected the need to continue such support. When asked what the Government do for cultural diversity in the UK as a whole, it is one good thing to which the Department of Culture, Media and Sport can point. 
 I would not like to see services decline as a result of lack of funding and I hope that the Minister will keep an open mind on future funding of S Pedwar C, especially as clause 202 allows the Secretary of State to make extra payments in advance of the RPI to reflect new services. As those services come on stream, and as S4C shows that those services are wanted and used by people in Wales, the Government may be inclined to give sufficient support to allow those services to be sustained and expanded.

Michael Fabricant: Clauses 200 and 201, which we have already discussed, refer to the provision of
 services including digital services. There are three ways to provide a service: by using a satellite platform, through cable or through transmission of digital terrestrial services, which was specifically said when we debated those clauses.
 Clause 202 concerns the financing of such services. Subsection (1) deals with the fact that the Welsh authority must not charge individuals for the provision of those services, and I am sure that we all agree with that. As I think the Minister has said, some 50 per cent. of the population already receive digital television. Some 97 per cent. can receive analogue and digital. That leaves about 40 per cent. who do not currently receive digital transmission. Part of that can be rectified when cable expands its services. As the hon. Member for Rhondda points out, there are people in his constituency—he can count them—who have satellite dishes. There is no reason why, if some in a given road or area can receive satellite, others could not, if they got satellite dishes. However, there will be those who for technical reasons will never be able to receive a geostationary satellite transmission and, perhaps for financial reasons, cable television will not be expanded throughout Wales.

Chris Bryant: I am sorry to delay the hon. Gentleman, but he has prayed me in aid about four times in discussions on digital terrestrial television. Although I wholeheartedly want digital terrestrial television to sweep across the south Wales valleys, the hon. Gentleman is making a mistake in his analysis of the availability of satellite. I have yet to find a single house in the Rhondda that is not able to receive a satellite signal. The topography of the Rhondda is swerving, and many people live at the bottom of north-facing hills, but they are perfectly able to receive satellite. The issue, then, is choice. The hon. Gentleman should not mislead the Committee into thinking that large chunks of Wales cannot receive digital satellite.
Michael Fabricant rose—

Roger Gale: Order. I appreciate the importance of the issue, particularly to certain hon. Members whose constituents are affected. However, the matter does not come under clause 202, and I must hold the Committee to order. The hon. Member for Lichfield must either address himself to Welsh authority finances, or resume his seat.

Michael Fabricant: Thank you, Mr. Gale. I will not—I am not allowed to—respond to the intervention of the hon. Member for Rhondda. The Rhondda is a south-facing valley, so the case does not apply, anyway. I have already explained basic physics at some length to the Committee, and if any hon. Members care to speak to me outside the Committee, I will explain the matter further. I never tried to mislead the Committee or imply that large areas of Wales were unable to receive a satellite signal. However, I have said that some people will never be able to receive a geostationary satellite signal.

Roger Gale: Order. I am having some difficulty communicating with the hon. Gentleman this
 morning; I do not know why. I have instructed him either to refer to Welsh authority finances or resume his seat. I cannot put it plainer than that.

Michael Fabricant: Subsection (1) provides for the Welsh authority not to charge for the provision of services including digital terrestrial services. Subsection (2) says that it shall also
''be unlawful to impose a charge in contravention of subsection (1)'',
 and that is quite right. However, subsection (3) says: 
''The power of the Welsh Authority to do anything that appears to them to be conducive or incidental to the carrying out of their functions includes power, subject to subsection (4), to borrow money.''
 Subsection (4) says: 
''The Welsh Authority are not to borrow money except with the approval of the Secretary of State.''
 Clauses 200 and 201 deal with the provision of services, including digital services. I accept that the Minister will not give—no one should expect him to—any sort of blanket approval in advance of any application by the Welsh authority. However, what is the view of the Department for Culture, Media and Sport on the provision of digital terrestrial television? If the Welsh authority were to ask, under subsection (4), to borrow money—perhaps in conjunction with Crown Castle—to help fund the provision of digital terrestrial transmitters in those areas where satellite reception is not possible and where the choice mentioned by the hon. Member for Rhondda is not available, how would the Department for Culture, Media and Sport feel about such an application?

Kim Howells: I will turn first to the questions raised by the hon. Member for Ceredigion. He makes a valuable statement when he says that S4C is part of the ecology of broadcasting in the United Kingdom, as the jargon now has it. I think that we will see a proliferation of more regionally and locally based systems, which will change the face of broadcasting and fundamentally change its ecology in future.
 S4C is not prohibited from charging for the reception of S4C services outside Wales, as the hon. Gentleman knows. I understand his argument that S4C's funding should be compared with that of the BBC rather than with that of commercial broadcasters. He is quite right. However, the difference—and it is a horribly political difference—is that S4C is funded directly by the Government and not by the licence fee, which is a kind of arm's-length source of funding. As I said earlier, funding bids for S4C have to compete directly with other DCMS funding bids. 
 Under paragraph 5 of schedule 12, S4C has must-offer obligations. As the hon. Member for Lichfield told us a moment ago, and it is absolutely true, the Secretary of State has a power to consider the level of S4C funding in the light of the costs of providing the service. Those costs include transmission costs. 
 Subsections (1) and (2) will prohibit the authority from charging people in Wales for the reception or use of any of its public services, for any assistance that is provided to disabled persons for programmes included 
 in those services, or for any of the ancillary services that it provides in digital form. The intention is to ensure that all these publicly funded services are available to the general public in Wales free of charge. As I have said, the restriction on charging does not apply outside Wales because the Government believe that decisions on the extension of S4C services to the rest of the United Kingdom, and on how to fund such provision, should be for the authority to determine. I fully understand the point that the hon. Member for Ceredigion made about the funding implications of that statement. 
 The authority will continue to have the power to borrow money—and this point was raised by the hon. Member for Lichfield—where this is incidental or conducive to the carrying out of its statutory functions. Borrowings, of course, will need to be approved by the Secretary of State, with the consent of the Treasury. 
 Clause 202 also requires the authority to pay Ofcom a contribution covering the cost of its functions in relation to the authority. The amount to be paid will be agreed between the authority and Ofcom. If they are unable to agree, the amount will be fixed by the Secretary of State. 
 The clause includes provision to extend the matters that the Secretary of State can take into consideration in assessing the case for an increase in the authority's grant. That provision is very important. At present, under section 61 of the Broadcasting Act 1990, she may increase the amount of the grant in real terms only if satisfied that it is appropriate to do so having regard to the cost to the authority of transmitting S4C and S4C digital. Subsection (7) of the clause will enable the Secretary of State to have regard to the cost to the authority of providing not only S4C and S4C digital but any additional public services approved by, or under, clause 200, as well as to the cost of broadcasting or otherwise distributing those services. 
 Subsection (8) amends section 61A of the Broadcasting Act 1990 and ring-fences the Welsh authority's public service fund. The amendment is necessary as a consequence of the arrangements for the approval of new public services introduced by clause 200. As well as S4C and S4C digital, any additional public service approved by or under clause 200 may be funded from the public service fund. 
 Finally, subsection (8) requires that all programmes that are wholly or partly funded from the public service fund must first be broadcast on one of the authority's public services in order to ensure that there is the widest possible audience for such programmes. 
 Question put and agreed to. 
 Clause 202 ordered to stand part of the Bill.

Clause 203 - The Gaelic Media Service

Calum MacDonald: I beg to move amendment No. 384, in
clause 203, page 178, line 19, at end insert— 
 '(d) the holding of licences to provide a service of Gaelic television and sound programmes so as to be available to persons in Scotland and elsewhere.'.

Roger Gale: With this it will be convenient to discuss the following:
 Amendment No. 385, in 
clause 203, page 178, line 27, at end insert— 
 '(4C) For the purpose of enabling the Service to carry out its functions, it shall be the duty of each of the persons mentioned in subsection (4D) to provide the Service, free of charge (including any charge arising from royalty payments), with at least 52 hours of new Gaelic programmes per year, with material from their archives, and, in the case of the BBC, with no less than 30 hours of new Gaelic radio programmes per week. 
 (4D) The persons referred to in subsection (4C) are— 
 (a) the BBC, 
 (b) any holder of a Channel 3 licence to provide a regional Channel 3 service for reception wholly in Scotland, and 
 (c) such other persons providing television broadcasting services as may be specified by order by the Secretary of State.'.
 Amendment No. 386, in 
clause 203, page 179, line 2, at end add— 
 '(5) The Gaelic Television Fund shall be linked to the retail prices index.'.
 Amendment No. 390, in 
schedule 15, page 447, line 27, leave out 'In'.

Calum MacDonald: Many of the comments that we heard during last Tuesday's debate on Welsh broadcasting about the achievements and the success of minority-language broadcasting are applicable to Gaelic-language broadcasting. It is important to emphasise that the success and achievement of Gaelic-language broadcasting happens in a different context. The Gaelic broadcasting fund is just over 10 years old, while the Welsh equivalent is 20 years old. The fund receives less cash than its equivalent, and I shall address that while speaking to one of the amendments. There is no Gaelic television channel so Scotland has no counterpart to S4C. However, we hope that the Bill will open the way for a digital Gaelic channel. The Gaelic-speaking community in Scotland is smaller than the Welsh-speaking community in Wales.
 Nevertheless, Gaelic broadcasting during the past 10 years has shared many of the achievements and successes of Welsh broadcasting. We cannot claim an Oscar nomination, which we heard about on Tuesday, but Gaelic programmes have won BAFTAs. I pay tribute to the BBC and Channel 3 in Scotland and to independent producers, which make many of the programmes, for their success over the past decade. 
 Gaelic-language programmes shown on the BBC and Channel 3 in Scotland enjoy audiences that are much larger than the number of Gaelic speakers recorded by the census. It was said on Tuesday that S4C has average audiences of 700,000. Gaelic-language programmes in Scotland get average audiences of more than 300,000. That is a smaller figure that the Welsh average, but it is three times greater than the pool of Gaelic speakers in Scotland. That demonstrates that Gaelic-language programmes have developed a resonance that goes beyond the pool 
 of native speakers and that they have penetrated the mainstream of Scottish broadcasting. 
 Before the sitting started, my hon. Friend the Member for Glasgow, Anniesland (John Robertson) asked me whether I could produce specific figures to illustrate the success of Gaelic programming in Scotland. I have several figures that he will find especially interesting. My fellow Scots will be aware that there are three current affairs programmes on Thursday nights on BBC2 in Scotland. One is ''Eorpa'', which is a Gaelic programme that examines current affairs from throughout Europe in a distinctive way that has gained a lot of praise. ''Newsnight'' is also broadcast in Scotland. The UK programme goes out at 10.30 pm, but non-Scots on the Committee may not be aware that there is also a Scottish ''Newsnight'' opt-out that clocks in at around 11.00 pm. The audience figures for the various programmes show that the Gaelic media programme ''Eorpa'', regularly does better than the Scottish ''Newsnight'' opt-out. 
 If one takes one week in November last year at random, the audience for ''Eorpa'' was 86,000, ''Newsnight'' UK's was 71,000 and for the Scottish ''Newsnight'' it was 35,000. I emphasise that those figures are taken from one week at random and figures for programmes vary, but ''Eorpa'' regularly does better than the Scottish ''Newsnight'' and the Sunday ''Holyrood'' programme. That is testimony to the success of Gaelic-medium broadcasting in establishing itself in the Scottish broadcasting world. In doing so, it has been an essential support bulwark for the language, just as S4C has been in Wales. Moreover, I echo the point previously made by the hon. Member for Ceredigion: minority language broadcasting enhances and embellishes the whole of the UK's broadcasting provision. 
 Clause 203 establishes the Gaelic Media Service and represents what I believe will be a major step forward in Gaelic broadcasting, as significant in its way as the establishment of the first Gaelic television fund in 1991. I hope and believe that the clause opens a way for the creation of a dedicated Gaelic digital channel to provide, for the first time on television, a comprehensive and integrated service. It can be scheduled to meet its audience's needs in a way that, unfortunately, the Gaelic programmes currently on the BBC and Channel 3 cannot always achieve. 
 The wording of the clause, however, does not make the establishment of such a service explicit, which is why I tabled amendment No. 384. It is a probing amendment that invites the Minister to put on record what the new Gaelic Media Service can do. The clause describes at some length what it cannot do, especially in subsection (4B), but is less explicit about what it can do. 
 Amendment 384 would make explicit the power of the service to apply to Ofcom for a broadcasting licence to broadcast a television service on whatever platform turns out to be feasible and cost-effective. After the word ''Scotland'' in the amendment, I have added ''elsewhere'' to take up a point previously made 
 about Welsh language broadcasting. New technology makes possible the delivery of Gaelic programmes elsewhere in the UK wherever there is an interest and potential audience—there is an ancient and honourable Gaelic Society in London, which takes an active interest in such issues. The Minister should clarify whether the Gaelic Media Service would be acting within its remit in satisfying that wider audience in the UK, if it were feasible and cost-effective. 
 Will the Minister confirm whether the new service will also be able to distribute programmes via the internet? Mention was made of the potential importance of that in the debate on Welsh. There is a vibrant and live Scottish diaspora across the world. I lived in the United States from 1978 to 1984, and every Saturday evening I could access a programme called ''The Thistle and Shamrock'', broadcast from North Carolina, on the national public service radio. Every Saturday evening I could hear the music and songs of the Hebrides, wherever I was in the United States. The presence of that programme on a national, federally funded radio channel shows the degree of interest in Gaelic music and culture. Perhaps by using the internet and broadband we will can tap into that interest in future. It would be useful for the Minister to confirm that doing so would be within the service's remit.

Chris Bryant: I rise on a point of information. My hon. Friend may be interested to know that the Finnish broadcasting service, YLE, provides a news service in Latin every day.

Calum MacDonald: There is no doubt that radio programmes are increasingly being accessed by people using the internet on personal computers. One imagines that in future television programmes will be increasingly accessed that way, too. If the Bill is to be future-proof, as the Government hope, it is important that we allow such possibilities to the Gaelic Media Service.
 There is an apparent ban in subsection (4B) on the service providing a radio broadcast. I am not quite clear on what the subsection prohibits the service from doing, but I would like the Minister to confirm that the ban would not prevent the Gaelic Media Service from using its licence to transmit certain graphic-only programmes on a digital channel. If the service is to be able to provide a digital channel in future, it is unrealistic to think that there will be a full morning-to-midnight service. There will be times when programmes need to be bulked out by sound programmes or still pictures. It is important to make sure that subsection (4B) does not prevent the service from doing that.

Simon Thomas: The hon. Gentleman will recall that in our debate on S4C, the reason that the Minister gave as to why S4C should not get involved in broadcasting sound programmes or radio programmes was that there was more than adequate public service provision in Wales, as Radio Cymru, a dedicated Welsh radio station broadcasting in Welsh, is provided by the BBC. Does the BBC provide a dedicated Gaelic radio service in Scotland?

Calum MacDonald: Yes, and so I am not challenging the prohibition as such. I am asking that the prohibition not be interpreted so strictly as to prevent the use of radio programmes to fill out downtime on a digital channel.
 If we are to move towards delivering a digital channel, the new service that is being established by the clause will need additional resources. I tabled amendments Nos. 385 and 386 to cover the two most important kinds of resources. Of course, the most important is cash, and that is the subject of amendment No. 386. I do not expect the Under-Secretary to plonk a bag of cash down on the table. I looked carefully when she came into Committee, and she did not seem to have a particularly heavy handbag. The purpose of the amendment is to flag up the seriousness of the financial squeeze currently hitting Gaelic broadcasting, and the need for the Government to address it soon. 
 When the television fund was set up in 1991, it was given £9.5 million a year. It is fair to pay tribute to the Conservative Government, although that may be controversial for my hon. Friends, for setting up the first Gaelic television fund and the Gaelic Broadcasting Committee, which manages it, and for their commitment, which they demonstrated by giving the fund what was then a very respectable sum. The Government must have been feeling flush back in 1991. 
 If the value of the fund had been maintained from 1991 onwards—if it had been index linked or protected in the way that Welsh language broadcasting has been protected—it would be worth £12.5 million today. That sum would go a long way towards achieving the digital television channel to which we aspire. Instead, the fund is down to £8.5 million, which is a reduction of £1 million in nominal terms and 33 per cent. in real terms. 
 As a consequence, the television hours that are financed from the fund have dropped from 195 in 1991 to 150 today. Quantity has been falling for a number of years, but I pay tribute to the Gaelic Broadcasting Committee and the various programme makers for maintaining the quality. Welsh language broadcasting has not been subject to such a squeeze, and I believe that the Gaelic television fund deserves similar protection in principle, hence the wording of amendment No. 386. The fund must be increased in real terms, not just restored or protected, if it is to fulfil the potential of the clause and if it is to deliver a Gaelic digital channel. 
 Donald Dewar, then Secretary of State, followed my suggestion and commissioned a report into the cost of a Gaelic channel from Alistair Milne, the ex-director-general of the BBC. Milne reported to the Government two years ago and suggested that a fund of £44 million a year would be required. There is a huge gap between the current position and the fund proposed by Milne. Since then, recent research commissioned by the Gaelic Broadcasting Committee has suggested that a channel could be delivered for £15 million per annum through the use of new technology and by reducing the cost to the minimum feasible sum. 
 That is a significant saving on the Milne figure, but it is still not within the reach of the present fund. I know that the Under-Secretary will be limited in what she can say today about the funding problem, and I know that the Treasury is the major player in all the discussions, but I hope that she is mindful of the problem and I hope that the Government will engage with the issue when resources allow that to happen. 
 The other resource that is necessary to deliver a channel is as important as cash, and it is one over which the Under-Secretary has real, immediate influence and power. That resource is access to programmes for rebroadcast on a dedicated Gaelic channel which have already been broadcast by the BBC and Channel 3. I have suggested, in amendment No. 385, that an hour a week of new Gaelic television programmes and 30 hours a week of new Gaelic radio programmes be made available for rebroadcast on a digital channel. 
 There is a precedent for that requirement—it already happens in Wales. The hon. Member for Ceredigion would concede that, in order to deliver S4C, programmes must be available for rebroadcast. Likewise, under the Broadcasting Act 1996, both the BBC and the Scottish Media Group, the Channel 3 broadcaster in Scotland, are currently obliged to provide 30 hours of programmes a year for rebroadcast in an existing daily slot on multiplex A that is run by STL. An increase from 30 to 52 hours, as I suggested, should be manageable for both the BBC and Channel 3. 
 I have tried to make it clear in the amendment that ''free of charge'', as stated in the 1996 Act, should mean exactly that. I put that in because unfortunately there is a history of arguments and difficulties between BBC and Channel 3 and the provider of the Gaelic slot multiplex A about royalties and so on. Consequently, the requirement in the 1996 Act has never been properly fulfilled. I ask the Government not only to legislate for the number of hours set out in the amendment but, if necessary, to ensure that the provision is delivered. It costs very little for the BBC and Channel 3 to provide programmes for rebroadcast, but it would cost the taxpayer an enormous amount if the Gaelic broadcasting fund had to pay. I hope that the Minister will respond positively and strongly to the amendment. 
 Amendment No. 390 relates simply to a typo that I discovered when reading the Bill, which I thought that I would pass on to the Minister.

John Whittingdale: I begin by thanking the hon. Member for Western Isles (Mr. MacDonald) for the generous words with which he paid tribute to the previous Conservative Government—without which Gaelic broadcasting would never have got off the ground. We were disappointed that the Scottish people did not show the appreciation for which we had hoped at the subsequent general election but never mind; it was a noble enterprise anyway.
 I shall say a few words about amendment No. 385 because I am slightly worried that it could represent a burden on the commercial television sector. Channel 3 licence holders are already obliged to supply archive 
 material to any Gaelic multiplex holder. That obligation is currently complied with and relates to 
''such programmes in Gaelic which have been broadcast by the supplier''—
 presumably Channel 3 or the BBC— 
''as the holder may request.''
 The amendment addresses the supply of programmes to the Gaelic media service. At present, the obligation is not owed to the CCG—I shall not even try to say what that stands for, although the hon. Gentleman could—but to the multiplex holder. It does not make sense for the obligation to be owed to the service, especially because the Bill prohibits it from providing a multiplex service. 
 The supplier is also currently not obliged to provide that the material should be supplied free of any royalty charges in respect of clearance costs, which is the point that the hon. Gentleman addressed through the amendment. It is more appropriate for the clearance costs to be borne by the multiplex holder, rather than the supplier. It is rather unfair that the supplier is obliged to make additional payments for further broadcasts on the multiplex after handing the programme to the multiplex holder. Most material has probably been purchased on the basis that it can then be transmitted as the owner chooses. There would therefore be no additional charge if there were further transmissions on the multiplex. However, that will not always apply. There are cases in which additional charges would be paid for music royalties. It seems unnecessary that that charge should be imposed on the supplier of the material, especially if it is Channel 3. 
 The amendment seeks to increase the number of hours of Gaelic programmes to 52. In the case of the BBC, I have no particular difficulty with that. The BBC has a lot of money at the moment—almost more than it knows what to do with—and such a use of the BBC's licence fee billions would meet the requirements of the public service remit and would be worth while. However, all the Channel 3 licence holders in Scotland are under considerable financial pressure, and the amendment would represent a significant additional burden on them. There are grounds for concern.

Calum MacDonald: I appreciate what the hon. Gentleman is saying. However, he may not be aware that it is a condition of holding a Channel 3 licence in Scotland that a certain number of Gaelic programmes be broadcast. The hon. Gentleman may remember that Scottish Television was able to pick up the licence for a song. It was able to do so because it expressed a willingness to embrace the Gaelic obligation. Arguably, there has been a positive monetary value to the Channel 3 licence holder in Scotland because of the obligation.
 The hon. Gentleman may not be aware that the Channel 3 provider in Scotland is now negotiating with the Independent Television Commission to try to reduce the obligation on them from 66 hours to 33 hours.

John Whittingdale: As I understand it, under the current licence obligations, the licence holder is obliged to provide 33 hours of Gaelic programming. Obviously, the hon. Gentleman's amendment would increase that figure, representing an extra burden. That burden may not be enormous, but this may not be the most opportune moment to impose it. I therefore have some reservations about amendment No. 385. However, we remain wedded to the concept of the promotion of Gaelic broadcasting.

Simon Thomas: I rise to support the principles behind the amendments of the hon. Member for Western Isles. As he says, many of them reflect the experience that we have had in Wales. Had we not established Sianel Pedwar Cymru, S4C, 20 years ago, we would no doubt be where the Gaelic Media Service is now—trying to provide a channel by collecting together the different elements of Gaelic broadcasting that already exist. I sympathise with the hon. Gentleman's task in his amendments. He is trying to improve the Bill as far as possible and to empower the new Gaelic Media Service to provide a dedicated channel, albeit through digital means. Everyone in the United Kingdom should welcome that because, as the hon. Gentleman said at the outset—reflecting our debate on S4C—these publicly funded lesser-used language channels reflect the cultural diversity of the United Kingdom. They are owned by everyone in the United Kingdom—Gaelic speakers, Welsh speakers, English speakers. Everyone has the right to access those programmes and to support them.
 What we are trying to achieve in this Bill and through the ecology of broadcasting, to use the jargon, is to reflect all the languages of the United Kingdom. We would hope to see more digital channels dedicated to, for example, Asian languages. That would reflect the position that has been established for the Celtic languages. 
 The amendments tabled by the hon. Member for Western Isles are important for the future of the Gaelic Media Service. I note that the reduction in funding to which he referred is real term, because S4C has not benefited from ring-fencing. 
 Despite studying Irish for one year, I would not attempt to pronounce the name of the Gaelic Broadcasting Committee, given that the two languages separated some time ago. At one time, I would have replicated the pronunciation. The committee said that there has been a reduction in the hours that are broadcast in Gaelic from 195 a year to about 115 a year. That reflects the reality of the situation and, I hope, undermines the negative argument of the hon. Member for Maldon and East Chelmsford. Given the fact that the Conservative Government can pat themselves on the back for establishing S4C and the Gaelic Broadcasting Committee, surely they should be giving a little more support to ensuring that such services are enriched for the future. 
 The hon. Member for Western Isles raised an interesting point about radio. He suggested that rebroadcast BBC programmes in Gaelic, Channel 3 programmes in Gaelic in Scotland and rebroadcast BBC Radio Scotland Gaelic programmes could be put 
 together as a package in one digital channel. He raised an interesting point when he said that the Bill, as drafted, may stop that happening because of the ban, which also affects S4C, on producing and broadcasting radio programmes. The opportunity to repackage in one channel what is already available, so that Gaelic speakers throughout the world, and certainly in the United Kingdom, know how to receive it is extremely attractive. I note what the hon. Gentleman said about the Milne committee report, but the Gaelic Broadcasting Committee estimated that it could set up such a package for about £15 million a year. That is a different kettle of fish from £44 million. 
 If we can achieve a dedicated Gaelic Media Service, broadcast on digital, for about £15 million, that is not a huge price to pay. I know that the Department would rightly say that it had other demands on its time and money, and resist such a proposal, but when we consider it in the round, given that it would support about 100,000 Gaelic speakers and many others who are learning the language, the price of £15 million seems reasonable. We should not try to stop that happening by using the Bill to ban certain measures that the Gaelic Media Service can undertake if, by putting together such programmes, a much better service can be produced. 
 I hope that the Under-Secretary will bear in mind the comments of the hon. Member for Western Isles. He raised an interesting concept of how, without establishing an authority for Gaelic broadcasting and another S4C in Scotland, we could achieve a dedicated channel in Gaelic that provided a range of both sound and visual services. I am sure that that will attract many people in the United Kingdom, as will the fact that we all support a diverse, cultural ecology in broadcasting.

Anne McGuire: Thank you, Mr. Gale. I am delighted that we have at last reached this part of the Bill, and that is not only because I thought that I had given up the vow of silence when I left the Whips Office.
 I offer my sincere congratulations to my hon. Friend the Member for Western Isles, who has dedicated himself to ensuring that the clauses would be as helpful as possible to the development of Gaelic broadcasting. Although the Gaelic community is small, it is fair to say that there is a high concentration of Gaelic speakers in his constituency. When the language was assailed by those of us who live in other parts of Scotland, Gaelic speakers kept to their traditions and culture. The Committee may not know that the Gaels say that Gaelic is the language of the angels. When most members of the Committee go to heaven—if they ever get there—they will not be able to understand a word that God says. 
 I also echo the comments of my hon. Friend the Member for Western Isles. There is a high-quality programming output from Gaelic broadcasting services. My hon. Friend the Member for Eastwood (Mr. Murphy) tells me that his children watch Gaelic television because they love the cartoons and Gaelic children's programmes. I am sure that he will ensure 
 that his children grow up bilingual and reclaim their Gaelic language tradition. 
 I despair, however, about the leisure pursuits of my hon. Friend the Member for Rhondda. I have a vision of him scouring the internet to pick up Finnish radio so that he can listen to programmes in Latin. I assure him that, as far as I am aware, there are no Latin-medium schools in Scotland, but Gaelic-medium education in Scotland is expanding at a rate that has taken many people by surprise. It is even expanding among non-Gaelic speakers. Having taxed you enough, Mr. Gale, in my opening remarks, I will answer the specifics of the debate. 
 As my hon. Friend the Member for Western Isles said, amendment No. 384 would add a new provision to enable the Gaelic Media Service to hold a licence 
''to provide a service of Gaelic television and sound programmes so as to be available to persons in Scotland and elsewhere.''
 We certainly believe that it is right for the Gaelic Media Service to broadcast a dedicated channel utilising cable, satellite or digital terrestrial television. The service will be able to hold the relevant licences from Ofcom to do that. 
 The Gaelic Media Service will also be able to use the internet, or sound and graphic only programmes as part of a continuous segment of scheduled programming in carrying out its functions. Furthermore, there is no specific need to extend the services beyond audiences in Scotland. New subsection (3B) of section 183 of the 1990 Act would give the service the function of securing the broadcast or transmission of programmes in Gaelic 
''so as to be available to persons in Scotland.''
 and new subsection (9) of that section makes it clear that a reference to being available to persons in Scotland includes 
''a reference to being available both to persons in Scotland and to others.''
 We therefore think that amendment No. 384 is unnecessary. The Gaelic Media Service may already hold any Ofcom licence, unless it is one specified in the new subsection (4B) that clause 203(3) would insert into section 183 of the 1990 Act. There is no need to include further provision. In the light of those comments, I hope that my hon. Friend will feel able to withdraw the amendment. 
 Amendment No. 385 would include new requirements for Channel 3 licence holders in Scotland and the BBC to provide a specific amount of new Gaelic programmes free of charge to the Gaelic Media Service. The Channel 3 licence holders in Scotland already have obligations under the Broadcasting Act 1990 to fund and broadcast Gaelic programmes. Their licence must require them to include in their services a suitable proportion of Gaelic programmes that are not funded out of the Gaelic television fund, and also to include programmes that are paid for out of that fund. A suitable proportion of the funded programmes must be of high quality, and a suitable proportion must be shown at peak times. Overall, their services must include a wide range of services in Gaelic. The actual targets are set by the ITC in the licences. 
 The BBC has no formal obligations, but spends about £3 million a year of its own resources on Gaelic programmes, broadcasting about 130 hours of material on BBC 1 and BBC 2 in Scotland and around 2,500 hours of radio programming on its dedicated Gaelic radio station, Radio nan Gaidheal. 
 In addition, under the Broadcasting Act 1996, the holder of the multiplex licence under which Channel 5 and S4C digital are broadcast—SDN—is required to broadcast at least 30 minutes of Gaelic programming every day in Scotland during peak viewing times. In complying with that requirement, SDN must broadcast at least 30 hours of Gaelic programmes a year, supplied by the BBC and the Channel 3 licence holders. The broadcasters are required to provide SDN, free of charge, with programmes in Gaelic from their archives. 
 I appreciate the point made by my hon. Friend and by the hon. Member for Maldon and East Chelmsford—a constituency that sounds like a BBC sitcom. I apologise to the hon. Gentleman's constituents. We acknowledge the difficulty and we are willing to see whether we can offer any assistance to ensure that the free-of-charge issue is clarified. 
 The amendment would impose on broadcasters an increase in their obligations, which has not been subject to any consultation or negotiation. It would also risk intruding into detailed commercial aspects of trading between broadcasters and the Gaelic Media Service, which would not be appropriate in primary legislation. 
 The Bill ensures the availability of a substantial amount of Gaelic medium broadcasting. With the structural changes that we are making in the Bill, that will provide a sound basis for the provision and development of broadcasting in the Gaelic language. In light of what I have said, I hope that my hon. Friend will not press amendment No. 385. 
 Amendment No. 386 seeks to link the Gaelic television fund with the retail prices index. We do not believe that it is acceptable for the Bill to provide for a guaranteed level of funding, whether measured against the RPI or any other indicator. Any comparison with S4C is unhelpful as the Welsh authority service was set up on a distinct basis to provide a fully fledged channel. The formula approach to funding was therefore a basic element in its construction. 
 In the case of Gaelic, we are dealing with a funding mechanism that, in my hon. Friend's words, reflects a more limited service of up to 200 hours financed by CCG grant. I hope that my hon. Friend will not press the amendment. I have said both inside and outside this House that I hope that we and the Scottish Executive can consider the case for new investment in the next spending round. The Scottish Executive have an input as part of the issue is within their competence. 
 Finally, I wish to congratulate my hon. Friend on his proofreading skills. He is correct to point out that 
 there is a typographical error, so we are more than willing to accept amendment No. 390.

Calum MacDonald: That is a small victory. I welcome what the Minister said about amendment No. 384 clarifying and putting on record the much enhanced powers of the Gaelic Media Service over the current arrangements. That will be warmly welcomed in the Gaelic-speaking world.
 On amendment No. 385, I welcome the Minister's commitment to help to sort out the ongoing arguments between the providers of the programmes and SDN, who are obliged to broadcast the programmes. The hon. Member for Maldon and East Chelmsford seemed to spend some time talking about Channel 3 but I am not sure whether he had the same opportunity to talk to SDN or the Gaelic Broadcasting Committee about the matter. 
 I was careful not to place any blame on any of the parties in the dispute or to take sides. Arguments are going back and forth but it is welcome that the Government have offered to try to solve the dispute. In my view, free of charge, as set down in legislation by the Conservative Government of the time, ought to mean exactly that, especially given the limited resources of the Gaelic television fund and the difficult commercial position of multiplex A, which has to compete in the commercial world. 
 I acknowledge what the Minister said about it being inappropriate to put in the Bill the obligations set out in the amendment. The original obligation of 30 hours was set out in secondary legislation in 1996, and that is probably the most appropriate way forward. 
 I appreciate what the Minister said about the Government examining funding in future spending rounds. Of course, she tried to say that the situation of Gaelic is different from that of Welsh, but the question is whether all the differences can be justified. The difference that has caused the reduction in Gaelic funding over the past decade cannot be justified. I welcome her acknowledgement of the problem and although I am not sure whether she wants me to withdraw amendment No. 390, I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Roger Gale: Just to set the hon. Gentleman's mind at rest, amendment No. 390 has not been moved. We shall move it at the appropriate time during our consideration of the Bill.
 The Chairman, being of the opinion that the principle of the clause and any matters arising thereon had been adequately discussed in the course of debate on the amendment proposed thereto, forthwith put the Question, pursuant to Standing Orders Nos. 68 and 89, That the clause stand part of the Bill. 
 Question agreed to. 
 Clause 203 ordered to stand part of the Bill.

Clause 204 - Membership of the Service

Calum MacDonald: I beg to move amendment No. 387, in
clause 204, page 179, line 13, leave out subsection (5).

Roger Gale: With this it will be convenient to discuss the following:
 Amendment No. 388, in 
clause 204, page 179, line 17, at end insert— 
 '(d) a member nominated by SDN'.
 Amendment No. 389, in 
clause 205, page 180, line 21, after 'Service', insert 
 'or of any organisation which receives funding from the Service'.

Calum MacDonald: The clause and the amendments relate to the membership of the board that will oversee the Gaelic media service. Amendment No. 387 relates to subsection (5), which says that the members of the service—the board, as it were—must include members nominated by the BBC, Highlands and Islands Enterprise and Bòrd Gàidhlig na h-Alba—the Gaelic development agency.
 The amendment would delete subsection (5). That is not because I object to members of those organisations nominating members of the board, but because it is not sensible for the Bill to be so prescriptive about the composition of the Gaelic Media Service. Circumstances and organisations may change in future and guidance issued by the Secretary of State under subsection (6)(b) would sufficiently allow the Secretary of State to influence the shape and composition of the board. That would be a more flexible way of handling things that could deal with different circumstances in future. 
 If the Minister is not inclined to accept the logic behind amendment No. 387, I hope that she will consider the merit of amendment No. 388. If she insists that it is a good idea to list specific organisations that would be entitled to nominate members, the organisations responsible for the current daily output on multiplex A should be included. SDN carries an hour of Gaelic a day and contributes a significant sum each year for logistical and technical support for Gaelic broadcasting. It has done that willingly, and that should be properly acknowledged, along with the contributions of the BBC in Scotland. I therefore suggest that SDN, TeleG or an appropriate part of the multiplex provision be entitled to nominate a member to the board, too. 
 Amendment No. 389 takes up the prohibition, in subsection (3), on a member of the service becoming a member of the board. That is presumably to avoid a conflict of interest. The point of the amendment is that employees from organisations such as the BBC, the Scottish Media Group, the Channel 3 broadcaster and, from time to time, employees from the independent sector may also be subject to a conflict of interest, as those organisations will be competing for grants and funding from the Gaelic Media Service. I believe that serving members from those organisations should be subject to the same prohibition as employees from the service itself.

John Whittingdale: On that point, is the hon. Gentleman saying that the BBC should not have any members on the board of the service?

Calum MacDonald: No, I am not saying that at all.
 The BBC will have the right to nominate someone to sit on the board. I am suggesting that if the BBC nominates an existing employee—probably someone involved in Gaelic broadcasting—to sit on the board of the Gaelic Media Service, which funds programmes and takes bids from the BBC funding of programmes, there is an obvious conflict of interests. The solution would be for the BBC not to nominate serving employees involved in Gaelic production, and likewise for other organisations that take funding from the Gaelic Media Service. There is a genuine problem, and the Government will have to consider it.
 I hope that the Under-Secretary will say that she does not expect Ofcom to nominate employees who would potentially have a conflict of interest. That still leaves plenty of scope for the BBC and other organisations to nominate people who will genuinely contribute to the Gaelic Media Service board, but who will not have a conflict of interest. I hope that the Under-Secretary will consider the merits of the amendments, particularly Nos. 388 and 389.

Anne McGuire: I shall deal with amendments Nos. 387 and 389 first. In our opinion, they would negate the Government's basic aim of increasing the broadcasting expertise of the Gaelic Media Service board for the benefit and oversight of the service. In essence, they would remove from the Bill any obligation on the part of Ofcom to seek and secure representation on the board of the Gaelic Media Service from the BBC, the Gaelic Development Agency and Highlands and Islands Enterprise, which are all key players. However, the amendments would leave Ofcom with specific obligations to secure representation from Channel 3 licence holders and others, as provided for in clause 204(7).
 The Government's objective is to strengthen the representative base of the new body in a way that ensures that key players in the broadcasting and media fields are fully involved in helping to develop and oversee the service. It is right to involve the organisations that the amendment would exclude. They bring a wealth of expertise and knowledge to the table. On the specific point concerning the conflict of interest raised by my hon. Friend, we think that part of that will be covered by schedule 19, but we agree to cover some of it, particularly the exact status of nominees from those nominating bodies, in guidance. I hope that that assurance will give my hon. Friend some confidence and allow him to withdraw amendment No. 387, and I hope that he will not press amendment No. 389. 
 Amendment No. 388 would ensure that a member of the Gaelic Media Service board was nominated by SDN, the current holder of the multiplex licence which has an obligation to broadcast Gaelic programmes each day in Scotland. 
 It would clearly not be right to accept the amendment, because there is no guarantee that SDN will continue to hold the relevant multiplex licence. We sympathise with the aim of the amendment to recognise the role of SDN, which, as my hon. Friend 
 has said, makes a significant contribution to Gaelic broadcasting through logistical and technical support. I assure my hon. Friend that in the guidance about appointments to the board of the Gaelic Media Service issued by the Secretary of State to Ofcom, we will seek to ensure that the correct balance is struck between consumer and expert interest in broadcasting matters. At the end of the day, that is the core policy objective in setting up a new board to take the service forward for a 21st century delivery of broadcasting services in Gaelic. Therefore, I ask my hon. Friend to withdraw his amendment.

Calum MacDonald: I am encouraged by what my hon. Friend the Under-Secretary of State for Scotland has to say about recognising the contribution of SDN. I acknowledge that that will be taken into account when it comes to forming a board and in discussions with the Secretary of State to ensure that the role of SDN is fully and properly acknowledged. The contribution of SDN in providing the prototype of a future Gaelic digital service is critical. It is important that it is able to sit alongside the other broadcasters—the BBC, Channel 3 and so on—in the decision-making process concerning the Gaelic Media Service. I welcome the fact that my hon. Friend the Minister has taken that on board.
 I also welcome her recognition that there is a problem with the conflict of interest that I have outlined. It could be easily managed—it is not a showstopper of a problem—but the Secretary of State and Ofcom will have to bear it in mind when it comes to the nomination of members to the board. I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Clause 204 ordered to stand part of the Bill. 
 Clauses 205 to 208 ordered to stand part of the Bill.

Clause 209 - Digital Channel 3 and Channel 5 licences

Amendment proposed: No. 360, in 
clause 209, page 182, line 19, leave out '31st December 2014' and insert 'the initial expiry date'.—[Dr. Howells.]

Roger Gale: With this it will be convenient to discuss the following:
 Government amendments Nos. 361 to 367. 
 Amendment No.391, in 
clause 219, page 192, line 11, leave out from 'begins' to 'and' and insert 
 'on the date on which the replacement licence comes into force'.
 Government amendments Nos. 368 to 380. 
 Government new clause 28—Meaning of 'initial expiry date'.

John Whittingdale: I should like to raise a couple of points. The explanatory letter that the Minister for Tourism, Film and Broadcasting helpfully sent to the Committee set out why the Government felt it necessary to move the amendments. He stressed the
 existing arrangement that the replacement licence is due to expire on 31 December 2014, which is based on the prediction that digital switchover will take place between 2006 and 2010. The Government have now said that it is necessary to move amendments because
''it is not certain that switchover will in fact take place then.''
 The Government go on to say: 
''There is a concern that the present provisions could prove too inflexible if switchover is delayed''.
 We talked about digital switchover earlier in the proceedings and the Minister for E-Commerce and Competitiveness, the hon. Member for East Ham (Mr. Timms) expressed his confidence that the timetable for achieving digital switchover would be met. The explanatory letter slightly goes against that confidence. I shall be interested to know the views of the Minister for Tourism, Film and Broadcasting on whether that is an entirely theoretical possibility or whether it demonstrates that there is some unease in his Department about meeting the timetable. 
 I now turn to amendment No. 391. Under the proposals as they stand, the new digital licences will be imposed on existing licensees, who will have no opportunity to apply for the financial terms to be amended. The Government have stressed that that is simply a continuation of the existing arrangements. However, the new digital licences include several new obligations, which are set out in forthcoming clauses. If licensees are to meet those new obligations under an entirely new regulatory regime, it is unreasonable to require existing licensees to take up those new licences without at least an opportunity to assess the appropriateness of the financial terms. Therefore, the amendment's purpose is to allow licensees to ask that the financial terms be looked at again.

John Greenway: I shall be brief because I know that we want to make progress, but the amendments are very important. Notwithstanding what my hon. Friend has said, ITV—Channel 3—was uncomfortable with the wording of the clause. It is reflected in the explanatory letter that it has made representations to which the Government have responded.
 Like my hon. Friend the Member for Maldon and East Chelmsford, I hope that there will be opportunity to refer to that issue again. However, we are at a point in our proceedings at which it would be appropriate to begin to register concerns about Channel 3's financial health. Although the Minister will undoubtedly wish to proceed with the Bill as drafted, I hope that there will be opportunity, as we consider the provisions related to public service broadcasting obligations placed on Channel 3, particularly its regional obligations, to keep in mind some of warnings that have been given in recent months. 
 The excellent ITC publication, ''Television in the Nations and Regions'', from as recently as October 2002, states: 
''The ITV Charter for Broadcasting in the Nations and Regions is a serious attempt to address these pressures, but the current contrast between the financial health of the BBC and ITV's relative impoverishment means that concerns remain about ITV's ability to maintain its regional heritage.''
 One need only add that the purpose of raising that point now is that these are the relevant clauses for which opportunities to renegotiate some of the licence payments are either there or they are not there. At present, as my hon. Friend the Member for Maldon and East Chelmsford has said, they are not there. 
 Unless there is some unforeseen reversal in Channel 3's advertising income—and for that of Channel 4, as my hon. Friend mentioned the other day—Channel 3, as well as Channel 4 and Channel Five, will be continuously squeezed between a mammoth organisation such as the BBC, which is extremely well funded at present, and the growing strength of BSkyB. I hope that as our deliberations progress there will be an opportunity to return to this issue, notwithstanding that this is the clause where, if the Government wished to signal their ability and willingness to reconsider the financial elements of the licensed payments, such a change would be made.

Kim Howells: I agree with the hon. Gentleman. I panicked at the start because I thought we were not going to have a debate on this issue, which is why I leapt up rather quickly. I will speak first to the Government amendments and will address amendment No. 391 towards the end. The future of broadcasting is clearly digital—at least, I believe so at the moment; they may be famous last words. The hon. Member for Lichfield once told a Committee where I was present that the greatest number of sales of old-fashioned valves for radios was in the week before they were suddenly wiped out by solid state technology; a bit like the Canadian Tory party.
 With 40 per cent. of households in this country and more than 50 per cent. of the population now able to receive digital television, we lead the world. We should be proud of that. We are in an increasingly strong position to meet our target timetable for digital switchover and we are committed to ensuring that public service broadcasting continues after switchover. 
 The Bill contains several clauses that ensure that commercial public service broadcasting will continue until after switchover. Then we will be in a different market, with everyone enjoying the benefits of multi-channel television and interactive services, and we may wish to review the way public service broadcasting is delivered to adapt it to the new needs and expectations of our citizens. Clause 209 creates a new breed of licences—digital Channel 3 and Channel Five licences—that will require the licensed service to be broadcast primarily in a digital form. 
 Clause 209 provides for the first such replacement licences to expire on 31 December 2014, a date based on the prediction that digital switchover will take place in the period from 2006 to 2010, to answer the hon. Member for Ryedale (Mr. Greenway). That is the Government's target. The Bill provides that the licence holders will have the right to apply to renew their licences as from that date unless the Secretary of State, by order, withdraws that right. 
 Following further extensive discussions with stakeholders—to which the hon. Member for Ryedale is right to draw our attention—it appears that it would be better to provide greater flexibility as 
 to the expiry date and the date when decisions about licensing after switchover are taken. While we are in a good position to meet our target timetable for switchover—especially with the launch of Freeview, the vitality of BSkyB and a better future for cable operators—we cannot be certain that switchover will have been completed before 2014. I would be the last person to say with certainty that it will, but we are on target. 
 There is a concern that the present provisions could prove too inflexible if switchover is delayed and could be a disincentive to investment in digital take-up and the delivery of public service remits. Thus, we believe that the Bill should provide for a more flexible approach in or around 2014. In particular, we wish to provide that the Secretary of State cannot withdraw the right of renewal until after she has determined the timetable for switchover. We do not think it appropriate for the licences to expire before switchover is completed and we have a better view of the new post-switchover environment. 
 Amendment No. 377 will insert in clause 224 subsection (3A) which provides that the power to prevent the renewal of licences from the end of the initial licensing period can be exercised only if a date for switchover has been fixed that falls before the end of that period. That is the crux of the amendment. 
 Subsection (3B) provides that if the Secretary of State postpones the switchover date after she has made an order preventing the renewal of licences, that order will not have effect if the new date for switchover falls before the end of that period. Subsection (3C) makes it clear that in such a case, the Secretary of State will be able to make another order preventing the renewal of licences. However, that power will be subject to the requirement, under subsection (5) of new clause 28, that she must postpone the initial expiry date of the licences when that date falls during the 18-month period following switchover. 
 Amendment No. 378 defines 
''the date for digital switchover''
 by reference to new clause 28. That will be what appears to the Secretary of State to be the date after which Channel 3 and Channel Five services are no longer broadcast to any significant extent in analogue form. Under clause 209(3), she will give directions to Ofcom to ensure that there are conditions in the licenses to maintain analogue broadcasts until then. 
 If switchover is delayed, however, we do not want to be in the position that licences will have to be renewed in 2014 for 10 more years. That would be too inflexible, although we do not want to exclude the possibility of renewal, because a very good job might be being done. We therefore propose to introduce new clause 28, which will allow the term of replacement licences to be extended. The power is drafted so that the licences will continue for at least 18 months after switchover. New clause 28 defines the ''initial expiry date'' as either 31 December 2014 or any later date fixed by order by the Secretary of State. Amendments Nos. 360, 361, 365, 366, 373, 376, 379 and 380 provide for consequential wording changes. 
 Amendments Nos. 367, 368, 369 and 370 modify clause 219, which allows the holder of a digital Channel 3, digital Channel Five or digital public teletext licence to apply for a review of the financial terms of that licence at the time that he would have been allowed to do so had the existing legislation still been in force. Under the Broadcasting Act 1990, licensees are allowed to apply at any time on or before the sixth anniversary of the beginning of the licensing period. The Bill aims broadly to perpetuate that system. 
 As a result of the actual dates on which existing licensees have renewed their licences, none would have had more than two financial reviews under the Bill as drafted, with an expiry date for the licences of 31 December 2014. I think that the hon. Member for Ryedale pointed that out. Now that the licences may be extended, some licensees may have more than two opportunities for a review if that power is exercised. Amendments Nos. 367 to 372 and 374 alter clause 219. Amendment No. 368 defines a ''subsequent review period'' instead of a ''second review period'' and amendments Nos. 367, 369 to 372 and 374 provide for consequential changes. 
 Clause 223 gives Ofcom a duty to report to the Secretary of State on the advisability of renewing the licences of the public service broadcasters' licensees or making any other changes, such as altering the public service remits of any channel. Before the Government decide whether to allow Ofcom to renew the licences if it considers appropriate, they will need to take account of all the changes that have already occurred, as well as any foreseeable developments. There will, no doubt, be much discussion and consultation, both formal and informal, but we believe that a report made by Ofcom on the state of the market will be a very useful tool by which the Government can make their decision. The clause provides for that report to be given no later than 30 months before the end of a licensing period. Amendment No. 375 ensures that, if it appears to be appropriate to update that report when the Secretary of State has made an order extending the licences, after the report was submitted, she has the power to require a supplementary report. 
 The Bill also deals with the public teletext service, which I am sure that all Committee members will agree is a highly valued part of public service broadcasting. It provides that the public teletext service can be licensed through switchover on similar terms to those offered to other commercial public service broadcasters. Therefore, clause 213 requires Ofcom to secure the provision of a nationwide public teletext service that is broadcast in a digital form on a television multiplex and the current analogue service, which broadcasts on the spare capacity on which Channel 3, Channel 4 and S4C are broadcast in analogue form, until the switchover to digital. 
 If services switch from analogue to digital at different times, subsection (2)(b) as it is currently drafted would mean that for as long as one or more Channel 3 services, Channel 4 or S4C is or are being 
 broadcast in analogue form, an accompanying analogue public teletext service will also be broadcast. 
 Amendment No. 362 provides that an analogue public teletext service is required to be provided only until the first of Channel 3, Channel 4 or S4C ceases to be provided in analogue form. Amendments Nos. 363 and 364 give the public teletext licence holder the option of continuing to provide an analogue teletext service even when Ofcom no longer requires it to do so. As the analogue text service broadcasts on the spare capacity that Channel 3, Channel 4 and S4C are broadcast on, if one of the services switches to digital there will be insufficient capacity for the full nationwide analogue service to be delivered. However, giving the public teletext licensee the option of providing an analogue public teletext service on the remaining available capacity if he or she wishes to do so would mean that analogue viewers might continue to have access to the public teletext service—albeit a less comprehensive one. 
 On amendment No. 391, in the existing legislation, the commercial public service broadcasters are allowed to apply for a review of the financial terms of their licence four years before its term ends. Under clause 210, they will be granted new digital licences that will be valid until the end of 2014. However, we thought that it would not be fair for them to lose the possibility of having their licence payments reviewed by Ofcom every six years. Therefore, clause 219 gives the commercial public service broadcasters the opportunity to apply for a re-determination of their licence payments at broadly the same time that they would have been allowed to do so with their current analogue licences. 
 That amendment would allow Channel 3, Channel Five and the public teletext licensees to apply for a review of their financial terms as soon as they got their new digital licences. We believe that that is inappropriate. Generally, we do not believe that the new provisions will have a significant negative financial impact on the licensees; therefore, there is no reason why the conditions should be changed. After all—this is the hard bit—the licensees get the benefit of a new deregulatory system and of an extension of their licences until at least 2014 or 18 months after switchover. The exception to that general rule is that we recognise that the ''must offer'' obligations in clauses 264 and 265 and the ''must provide'' obligation in clause 266 could impose financial costs on the broadcasters that are subject to them if they were brought into force. However, in that event, a special right to have the financial terms reviewed will arise under the next clause—clause 220. 
 Of course, the licensees might argue that they had been faced with a serious advertising downturn—that has certainly been the case. That is a different issue, however, which has nothing to do with the fact that they get new digital licences. As far as I know, licensees do not come to us—not to the previous Government or to this Government—and ask for a revaluation of their financial terms when the benefits are better than were foreseen. They will harvest the profits. In any case, their licence payments, which are calculated partly as a percentage of their revenue, already take 
 into account their actual income. I hope that, in the light of that explanation, the hon. Gentleman will see fit to withdraw the amendment.

Roger Gale: The amendment cannot be withdrawn, as it has not been moved.

John Whittingdale: I hear what the Minister said. The benefits of the deregulatory regime are not quite as apparent to the Channel 3 companies as the Minister seems to think. In fact, the Bill imposes new obligations on them and they feel that it is only fair that they should be able to apply. I do not, however, want to prolong the debate, because I want to move on.
 Amendment agreed to. 
 Clause 209, as amended, ordered to stand part of the Bill.

Clause 210 - Replacement of existing Channel 3

Question proposed, That the clause stand part of the Bill.

Michael Fabricant: I have only a brief query. The clause, as I understand it, concerns the transfer of existing ITC licences to an Ofcom licence. Subsection (5), however, is causing some minor concern in the industry—so minor in fact that it did not require an amendment—and a little explanation is required. The clause concerns a simple transfer of the licence, although the Minister might correct me. Subsection (5) states:
''the grant of a licence to provide a service for an area or at times which, though substantially the same as in the case of the existing licence, are not identical.'' 
I suppose that the concern arises because that could be a blank cheque to alter the existing licence. Will the Minister provide some explanation to give comfort to existing ITV licence holders? They will receive a licence that is ''substantially the same'', as is stated in subsection (5), but what changes are likely to take place and what was in the Minister's mind when the subsection was drafted?

Kim Howells: I am grateful to the hon. Gentleman for raising that matter, but it is a minor quibble and I am sure that he would not want to blow it out of proportion. It is a simple technical issue; the area covered by digital from a transmitter can be changed. We must have that degree of flexibility to ensure that the existing licence does not limit the ability of the licence holder to operate in a slightly different way.
 Question put and agreed to. 
 Clause 210 ordered to stand part of the Bill.

Clause 211 - Renewal of Channel 3 and Channel 5 licences

Amendment made: No. 361, in 
clause 211, page 185, line 36, leave out '31st December 2014' and insert 'the initial expiry date'.—[Dr. Howells.]
 Clause 211, as amended, ordered to stand part of the Bill. 
 Clause 212 ordered to stand part of the Bill.

Clause 213 - Duty to secure the provision of a public

Amendments made: No. 362, in 
clause 213, page 187, line 1, leave out from 'as' to end of line and insert 'Channel 4, S4C and one or more Channel 3 services are'.
 No. 363, in 
clause 213, page 187, line 2, at end insert— 
 '(2A) The service, if licensed to do so in accordance with section 214, may continue to include an analogue teletext service after it is no longer required under subsection (2)(b) to include such a service.'.
 No. 364, in 
clause 213, page 187, line 3, after 'be' insert 'or may be'.—[Dr. Howells.]
 Clause 213, as amended, ordered to stand part of the Bill.

Clause 214 - Licensing of the public teletext service

Amendment made: No. 365, in 
clause 214, page 187, line 38, leave out '31st December 2014' and insert 'the initial expiry date'.—[Dr. Howells.]
 Clause 214, as amended, ordered to stand part of the Bill. 
 Schedule 10 agreed to. 
 Clauses 215 and 216 ordered to stand part of the Bill.

Clause 217 - Renewal of public teletext licence

Amendment made: No. 366, in 
clause 217, page 191, line 22, leave out '31st December 2014' and insert 'the initial expiry date'.—[Dr. Howells.]
 Clause 217, as amended, ordered to stand part of the Bill. 
 Clause 218 ordered to stand part of the Bill.

Clause 219 - Application for review of financial terms of replacement licences

Amendments made: No. 367, in 
clause 219, page 192, line 8, leave out 'second' and insert 'any subsequent'.
 No. 368, in 
clause 219, page 192, line 16, leave out subsection (3) and insert— 
 '(3) For the purposes of this section a subsequent review period in the case of a replacement licence is so much (if any) of the following period as falls before the end of the initial expiry date, namely, the period which— 
 (a) begins four years before a subsequent notional expiry date; and 
 (b) ends with the day before the day that OFCOM have determined to be the one by which they would need to publish a tender notice if they were proposing to grant a fresh licence to take effect from that notional expiry date.'.
 No. 369, in 
clause 219, page 192, line 29, leave out from beginning to end of line 31.
 No. 370, in 
clause 219, page 193, line 4, leave out from beginning to end of line 11 and insert— 
 ' ''subsequent notional expiry date'', in relation to a replacement licence, means— 
 (a) in a case in which an application by the licence holder for a review under this section was made during the review period beginning four years before the last notional expiry date, the tenth anniversary of the date on which OFCOM's determination on that review was notified to the licence holder; and 
 (b) in any other case, the tenth anniversary of the last notional expiry date;'.—[Dr. Howells.]
 Clause 219, as amended, ordered to stand part of the Bill. 
 Clauses 220 and 221 ordered to stand part of the Bill.

Clause 222 - Giving effect to reviews under ss 219 and 220

Amendments made: No. 371, in 
clause 222, page 195, line 8, leave out paragraphs (a) and (b) and insert 
 'must not fall before whichever is the earlier of— 
 (a) the next notional expiry date after the application for the review; and 
 (b) the end of the licensing period in which that application was made.'.
 No. 372, in 
clause 222, page 195, line 31, leave out from beginning to end of line 32.
 No. 373, in 
clause 222, page 195, line 35, leave out '31st December 2014' and insert 'the initial expiry date'.
 No. 374, in 
clause 222, page 195, line 37, at end add— 
 ' ''notional expiry date' means a first or subsequent notional expiry date within the meaning of section 219.'.—[Dr. Howells.]
 Clause 222, as amended, ordered to stand part of the Bill.

Clause 223 - Review in anticipation of new licensing round

Amendments made: No. 375, in 
clause 223, page 196, line 12, at end insert— 
 '(4A) Where the Secretary of State makes an order under section [Meaning of ''initial expiry date''] after receiving a report under this section in anticipation of the end of the licensing period that is extended by the order— 
 (a) he may require OFCOM to prepare a supplementary report in the light of the postponement of the beginning of the next licensing period; and 
 (b) it shall be the duty of OFCOM, within such period as may be specified by the Secretary of State, to prepare the required supplementary report and to submit it to him.'.
 No. 376, in 
clause 223, page 196, line 21, leave out '31st December 2014' and insert 'the initial expiry date'.—[Dr. Howells.]
 Clause 223, as amended, ordered to stand part of the Bill.

Clause 224 - Orders suspending rights of renewal

Andrew Lansley: I beg to move amendment No. 304, in
clause 224, page 196, line 33, leave out from 'section' to end of line 35.
 Having just passed clause 223, we have established that the right of renewal of licences for channels 3, 5 and public teletext is nevertheless subject to a review by Ofcom at a specified time. The clause sets out what has to be taken into account and how Ofcom will undertake the review before making a report to the Secretary of State. I have no quarrel with any of that. 
 I quarrel with clause 224, under which Ofcom can, in making the report, recommend that the current licence should not be renewed. It then goes on to say that even where Ofcom does not make such a recommendation, the Secretary of State can make an order to the same effect. No subsequent explanation of the basis on which the Secretary of State can do so is provided. Why is it tenable for the Secretary of State to refuse to allow channels 3, 5 and teletext licences to be renewed where Ofcom did not take that view? The discontinuity between the role of Ofcom and the Secretary of State is both transparent and undesirable. It would be better if a licence were not renewed only on Ofcom's recommendation.

Kim Howells: I understand what the hon. Gentleman is saying, but what will broadcasting look like in a decade? What will be the public's expectations about television services? What sort of public service will we need, and how can we best deliver it? I am sure that the hon. Gentleman would agree that, at present, he can no more answer that question than I can.
 We must have the flexibility to change the licensing system if we need to. It might not be necessary: we could continue with the same system, or use the Bill's powers to amend the public service remit. Perhaps it will be necessary, however, and we will have to prevent existing licences from continuing. The clause enables the Government to keep all options open. We have already discussed amendments Nos. 360 to 380 on the conditions for using that power. I hope that I explained them adequately to the Committee. I must resist the amendment.

Andrew Lansley: I am afraid that the Minister simply has not answered the point of the amendment. It is not that we know what will be the state of broadcasting in 10 years' time, whether it will be right for the licences to be renewed or that there is no case for amending the public service remit. The point is that we are establishing a regulator—Ofcom—whose task it will be to examine those issues. We have just agreed that it should do so under clause 223. The point of the amendment is not to deny flexibility in future, but to say that the flexibility relating to the renewal of licences should be exercised on the recommendation of Ofcom, not on the basis of the whim, arbitrary or otherwise, of the Secretary of State. The legislation will set out no criteria by which the Secretary of State
 would have a power to refuse the renewal of licenses in circumstances where Ofcom has not made such a recommendation. The Minister has simply not answered the point. I will not press this, but only for reasons of time. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Amendments made: No. 377, in 
clause 224, page 196, line 41, at end insert— 
 '(3A) The Secretary of State is not to make an order under this section preventing the renewal of licences from the end of the initial licensing period unless he has fixed a date before the end of that period as the date for digital switchover. 
 (3B) Where the Secretary of State postpones the date for digital switchover after making an order under this section preventing the renewal of licences from the end of the initial licensing period, the order shall have effect only if the date to which digital switchover is postponed falls before the end of that period. 
 (3C) Subsection (3B) does not affect the power of the Secretary of State to make another order under this section after postponing the date for digital switchover.'.
 No. 378, in 
clause 224, page 197, line 12, at end insert— 
 '(6A) Subsection (8) of section [Meaning of ''initial expiry date''] applies for construing references in this section to the date for digital switchover as it applies for the purposes of that section.'.
 No. 379, in 
clause 224, page 197, line 13, after first 'section' insert— 
 ' ''initial licensing period'' means the licensing period ending with the initial expiry date; and'.—[Dr. Howells.]
 Clause 224, as amended, ordered to stand part of the Bill. 
 Clause 225 ordered to stand part of the Bill.

Clause 226 - Meaning of ''television licensable content service''

John Whittingdale: I beg to move amendment No. 410, in
clause 226, page 198, line 36, after 'public', insert 
 'in any of the EEA States'.

Roger Gale: With this it will be convenient to discuss the following:
 Amendment No. 411, in 
clause 226, page 198, leave out line 42.
 Amendment No. 412, in 
clause 226, page 198, line 43, leave out 'if it' and insert 
 'to the extent that it'.
 Amendment No. 17, in 
clause 347, page 296, line 38, leave out 'three' and insert 'two'.
 Amendment No. 18, in 
clause 347, page 296, line 38, leave out 'to (5)' and insert 'and (4)'.
 Amendment No. 19, in 
clause 347, page 296, line 43, leave out 'a selection' and insert 
 'a sequence of at least two selections'.
 Amendment No. 16, in 
clause 347, page 297, line 3, leave out subsection (5).

John Whittingdale: We have now come finally to television licensable content services, which is an
 important part of the Bill. We have four minutes left in which to deal with it. The Minister will see that we have at least five different groups of amendments, which clearly we will not reach. Could I therefore ask him to write to us giving the Government's response to each group of amendments, as they raise questions that are important to the industry? If we cannot get a response from the Minister this morning on record, it would help if could give it in writing.

Kim Howells: I was going to be very amenable on this group of amendments. I will be delighted to write to the hon. Gentleman to ensure that he gets a substantive answer.

Andrew Lansley: When the Minister addresses some of these issues in writing, will he also take account of the amendments to clause 347 in my name, as they were a specific aspect of the Joint Committee's recommendation to which the Government effectively did not respond? The way in which we defined the scope of the licensable sector needs to be considered very carefully.

Kim Howells: I shall certainly undertake to do that. I understand the hon. Gentleman's insistence that he gets an answer on that. It is an important clause. This is a group of technical amendments. They are aimed at clarifying the definition of a television licensable content service. I am grateful to the hon. Gentleman and his colleagues who have raised these points. Although I am unable to accept the amendments as drafted, I propose to give further consideration to some of the points that we might have made in the debate had it occurred. I will undertake to write to both hon. Gentlemen about the amendments.

John Whittingdale: On that basis, I await the Minister's letter with eager anticipation and beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn

John Whittingdale: I beg to move amendment No. 413, in
clause 226, page 199, line 4, after 'which', insert 'is provided by means of television and'.

Roger Gale: With this it will be convenient to discuss the following:
 Amendment No. 414, in 
clause 226, page 199, line 6, after 'the', insert 'television'.
 Amendment No. 415, in 
clause 226, page 199, line 6, at end insert 'television'.
 Amendment No. 416, in 
clause 226, page 199, line 9, at end insert 'television'.
 Amendment No. 417, in 
clause 226, page 199, line 16, at end insert 'are provided by means of television and'.
 Amendment No. 418 in 
clause 226, page 199, line 17, after 'such', insert 'television'.
 Amendment No. 419, in 
clause 226, page 199, line 17, leave out 'relate' and insert 'the principal feature of which relates'.
 Amendment No. 420, in 
clause 226, page 199, line 19, after 'such', insert 'television'.

John Whittingdale: Perhaps the Minister would like to write me an equally helpful letter about these amendments.

Andrew Lansley: On a point of order, Mr. Gale.

Roger Gale: I am not in a position to take a point of order. I will take any points of order arising out of this morning's business at 2.30 pm.
 It being twenty-five minutes past Eleven o'clock, The Chairman proceeded, pursuant to Sessional Order C relating to programming [29 October 2002] and the Order of the Committee [10 December 2002] to put forthwith the Questions necessary to dispose of the business to be concluded at that time. 
 Clauses 226 and 227 ordered to stand part of the Bill.

Clause 228 - Modification of ss. 226 and 227

Amendment made: No. 519, in 
clause 228, page 201, line 12, leave out 'subsection (1)' and insert 'this section'.—[Dr. Howells.]
 Clause 228, as amended, ordered to stand part of the Bill. 
 Clauses 229 to 237 ordered to stand part of the Bill. 
 Clause 153 ordered to stand part of the Bill. 
 Clauses 170 and 171 ordered to stand part of the Bill.

Clause 172 - ''Relevant amount of gross revenue'' for the purposes of s. 171

Amendments made: No. 400, in 
clause 172, page 156, line 45, leave out subsection (4) and insert— 
 '(4) For the purposes of this section— 
 (a) the gross revenue of a person for a period, and 
 (b) the extent to which a part of a person's gross revenue is attributable to the provision of any service, 
 shall be ascertained in accordance with such principles as may be set out in a statement made by OFCOM.'.
 No. 401, in 
clause 172, page 157, line 7, leave out 'Rules made by virtue of subsection (4)(a)' and insert 'Such a statement'.
 No. 402, in 
clause 172, page 157, line 10, leave out 'rules' and insert 'principles set out in the statement'.
 No. 403, in 
clause 172, page 157, line 12, leave out subsection (6) and insert— 
 '(6) OFCOM may revise a statement made under subsection (4) from time to time. 
 (6A) A statement made or revised under this section may set out different principles for different cases. 
 (6B) Before making or revising a statement under this section, OFCOM must consult the Secretary of State and the Treasury. 
 (6C) OFCOM must— 
 (a) publish the statement made under subsection (4) and every revision of it; and 
 (b) send a copy of the statement and of every such revision to the Secretary of State; 
 and the Secretary of State must lay copies of the statement and of every such revision before each House of Parliament.'.—[Dr. Howells.]
 Clause 172, as amended, ordered to stand part of the Bill. 
 Further consideration adjourned.—[Mr. Jim Murphy.] 
 Adjourned accordingly till this day at half-past Two o'clock.